Dive Brief:

• Freight railroad company Norfolk Southern on September 11 fired its CEO, Alan Shaw, and its top legal officer, Nabanita Nag, after it learned the two were in a consensual relationship in violation of the company’s internal rules.
• “This change in leadership comes in connection with preliminary findings from an ongoing investigation that determined Shaw violated company policies,” the company said in a statement.
• Mark George, the company’s CFO, was named CEO and Jason Morris, the company’s vice president for law, was named acting corporate secretary.

Dive Insight:

The company has had a rough two years under Shaw, who was named CEO in 2022. In a widely publicized accident a few months after he assumed the top post, one of the company’s trains derailed in East Palestine, Ohio, releasing hydrogen chloride and phosgene in an environmental disaster that the area is still recovering from. While credited in some circles for his response to the accident, one of the company's investors, Ancora Holdings, pushed to remove him. Shaw retained his job after a proxy fight. 

Nag, who joined the company in 2020 as general counsel for corporate and rose to the top legal seat under Shaw’s leadership, was seen as a close partner to the CEO. 

“The relationship with Nag wasn’t new,” The Wall Street Journal reported. “It was going on — and employees were noting his behavior with Nag on work trips.”

The two often traveled together, The Journal said, raising eyebrows among staff. “On several work trips, employees said, Shaw and Nag stayed in a different hotel from other employees they were traveling with. And when they touched down in a new city, Shaw and Nag would often get in a car together, while other Norfolk employees hopped into a separate passenger van.”

Employees told The Journal that Ancora Holdings likely pushed the board to take action when it requested to see shareholder records after learning the company had initiated an investigation into the relationship. The board saw Ancora’s request, employees said, as “a possible step ahead of calling a special meeting or launching a second proxy fight.”

Nag was vice president and corporate counsel at Prudential Financial for six years before joining the company and was associate general counsel at Goldman Sachs for eight years before that, according to her LinkedIn page. She started in law as an associate at Shearman & Sterling in 2000 after earning her law degree at New York University. 

"Nabanita is a strategic thinker and collaborative leader who has made an immediate impact on our company," Shaw said when he announced her promotion to the top legal seat in June 2022, just one month after he was named CEO. "By bringing our law, government relations and audit and compliance teams together under Nabanita's leadership, we strengthen alignment across these departments as we engage with stakeholders on issues of importance to our company and the nation's economy."

Morris, the company’s acting corporate secretary, is a retired U.S. Air Force and Air National Guard officer and a former legislative director for U.S. Rep. Bob Inglis (R-S.C.). He joined the company in 2010 as a staff attorney and moved into safety-focused legal roles beginning in 2017, indicating he was the company’s legal point person on safety issues at the time of the train derailment. 

As assistant vice president of safety and environmental, starting in 2018, he led the company’s safety and environmental department, which his resume posted on Congress.gov says includes public safety, system safety coordination, environmental compliance, environmental operations and hazardous material incident response, among other things.  

When he was named vice president of law in June 2022, the company highlighted his background in logistics readiness in the military and his leadership role in safety and the environment, among other things, in a press release. 

"Jason is a skilled lawyer and effective leader who returns to the Law department with strong institutional knowledge and a broad range of experiences at Norfolk Southern," said Shaw at the time.